Balanced budget target 'at risk' with deficit: NB auditor general
Anonymous - CBC News
December 3, 2008
Finance Minister Victor Boudreau's massive projected deficit is putting New Brunswick "at risk" of violating balanced-budget legislation, Auditor General Mike Ferguson says.
The province's Fiscal Responsibility and Balanced Budget Act mandates the government to balance its books over a four-year cycle and reduce its debt as a percentage of gross domestic product.
The Liberal government closed its first year of the balanced-budget cycle in 2007-08 with an $86-million surplus and appeared to be heading toward an $18-million surplus in 2008-09.
Now Boudreau is projecting a $285-million deficit this year, foreshadowing another substantial deficit for 2009-10 and a two-year $1.2-billion capital spending program that will begin next year.
"The way I read [the update], they are going to be up into the high $7 billion of net debt very quickly," Ferguson said. "I don't want to be alarmist, but it wouldn't surprise me if they got to $8 billion very quickly in this time."
A growing net debt, the auditor general pointed out, will mean additional money will be paid to cover those costs.